Former Indian Prime Minister Manmohan Singh claimed that industrialists in India are living amid a “fear of harassment” by the government, while arguing the current regime's doctrine of “mala fide unless proven otherwise” is costing the economy dearly.
Singh, who liberalised the Indian economy as finance minister in 1991, said that the current economic slowdown in India is the result of national industries living in fear of harassment by government authorities.
In an article in the Indian daily The Hindu titled “Fountainhead of India’s Economic Malaise”, Singh states, “Many industrialists tell me that they live in fear of harassment by government authorities. There is a palpable climate of fear in our society today. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives.”
Industrial activity in the country has come to a grinding halt, as factory output data has been in the negative for two consecutive months, while credit to the commercial sector in April-October period is down 88 percent compared with the same period last year, according to the nation's premier financial institution, the Reserve Bank of India (RBI).
According to RBI, credit flow from banks to the commercial sector has fallen to some $13 billion in April to September this year, against a reported $105 billion in the same period last year. Industrial production dropped 1.4 percent in August and 4.3 percent in September.
These numbers lead experts to believe that second quarter GDP may remain below 5 percent. India’s largest lender, the State Bank of India, has projected 4.2 percent GDP in the July-September quarter of 2019. New quarterly growth data is likely to be released by the end of this month.